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Why it's cheaper to poison the poor

1 February 1992

By FRED PEARCE

‘Just between you and me,’ said the World Bank’s top official in a memo
that he has come to regret, ‘shouldn’t the Bank be encouraging more migration
of the dirty industries to the less developed countries?’

The World Bank’s headquarters in Washington DC leak so many memoranda
to the city’s pressure groups and lobbyists that there is one group, the
Bank Information Center, entirely devoted to disseminating them. And sure
enough, the words of Lawrence Summers, chief economist with the Bank that
lends from the world’s rich governments to poor governments, were all over
Washington last week.

Summers, an enthusiast for the Bank’s policy of encouraging poor countries
to open their borders to trade, went on to explain why he thought that it
was legitimate to encourage polluting industries to move to poor countries.
‘The measurement of the cost of health-impairing pollution depends on the
forgone earnings from increased morbidity and mortality,’ he wrote. So dangerous
pollution should be concentrated ‘in the country with the lowest wages’.

He added: ‘I think the economic logic behind dumping a load of toxic
waste in the lowest wage country is impeccable and we should face up to
that.’

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He also introduced the novel notion of the ‘under-polluted’ country.
These included the ‘underpopulated countries in Africa’ where ‘their air
quality is probably vastly inefficiently low compared to Los Angeles’. His
point was that since clean air, which he calls ‘pretty air’, is valuable
as a place to dump air pollution, it is a pity poor countries can’t sell
their clean air for this purpose. If it were physically possible there would
be a large ‘welfare-enhancing trade in air pollution. . .’ he says.

Summers admits in his much-faxed memo that there might be objections
to his case, on moral grounds for instance. But he concludes by saying that
‘the problem with these arguments’ is that they ‘could be turned around
and used more or less effectively against every Bank proposal for liberalisation’.

‘What he is saying,’ comments British environmentalist Nicholas Hildyard,
‘is that this argument represents the logical conclusion of encouraging
free trade round the world.’

Summers has responded wearily to the uproar over his remarks. They were
intended to be ‘highly ironic’. ‘These positions were stated as a sardonic
counterpoint’ to a more general argument, he writes in a memo with an initial
distribution list of six that is now chasing his earlier effort down Washington
fax lines.